North Korea factories humming with ‘Made in China’ clothes

DANDONG (China): Chinese textile firms are increasingly using North Korean factories to take advantage of cheaper labour across the border, said traders and businesses in the border city.

The clothes made in North Korea are labelled “Made in China” and exported across the world, they said.

Using North Korea to produce cheap clothes for sale around the globe shows that for every door that is closed by ever-tightening United Nations sanctions, another one may open.

The UN sanctions, introduced to punish North Korea for its missile and nuclear programmes, do not include any bans on textile exports.

“We take orders from all over the world,” said one Korean-Chinese businessman here.

Dozens of clothing agents were operating here, acting as go-betweens for Chinese clothing suppliers and buyers from the United States, Europe, Japan, South Korea, Canada and Russia, said the businessman.

Textiles were North Korea’s second-biggest export after coal and other minerals last year, totalling US$752 million (RM3.23 billion), according to data from the Korea Trade-Investment Promotion Agency. Total exports from North Korea last year rose 4.6 per cent to US$2.82 billion.

The latest UN sanctions, agreed earlier this month, have now completely banned coal exports.

Its flourishing textiles industry shows how impoverished North Korea has adapted, with a limited embrace of market reforms, to sanctions since 2006 when it first tested a nuclear device.

The industry also shows the extent to which North Korea relies on China as an economic lifeline, even as United States President Donald Trump piles pressure on Beijing to do more to rein in its neighbour’s weapons programmes.

Chinese exports to North Korea rose almost 30 per cent to US$1.67 billion in the first half of the year, largely driven by textile materials and other traditional labour-intensive goods not included on the UN embargo list, said Chinese Customs spokesman Huang Songping.

Chinese clothing manufacturers have been increasingly using North Korean textile factories even as they relocate their own factories offshore, including to Bangladesh, Vietnam and Cambodia. Reuters